THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO SUCH SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

                          ON STAGE ENTERTAINMENT, INC.

                                     FORM OF

                  WARRANT TO PURCHASE SERIES A PREFERRED STOCK

No. ________                                              March  13, 2001

                           Void After March 13, 2011

     THIS CERTIFIES  THAT,  for value  received,  _________,  with its principal
office at 3000 Sand Hill Road, Building 3, Suite 290, Menlo Park, California, or
assigns (the "Holder" or "Purchaser"), is entitled to subscribe for and purchase
at the  Exercise  Price  (defined  below) from On Stage  Entertainment,  Inc., a
Nevada  corporation,  with its  principal  office at 4625 West Nevso Drive,  Las
Vegas, Nevada (the "Company")  ______________________(______) shares of Series A
Preferred Stock of the Company (the "Preferred Stock"), as provided herein.

     This warrant  shall be exercised  within  thirty (30) days after receipt by
the  Holder of:  (i) a notice  issued  with the  approval  of a majority  of the
Company's Board of Directors (the "Drawdown Notice") and (ii) certification that
the  conditions  set  forth on  Exhibit A hereto  have been met (the  "Officer's
Certificate").  Both the  Drawdown  Notice and  Officer's  Certificate  shall be
completed and executed by the Company's Chief Executive Officer,  shall identify
this Warrant by reference to the warrant number listed above, shall indicate the
specific  use of proceeds  from  exercise of this Warrant and shall be in a form
reasonably  acceptable to the Holder.  The Purchaser shall exercise this Warrant
for amounts of not less than ____________ dollars ($____).

     1.  DEFINITIONS.  As used  herein,  the  following  terms  shall  have  the
following respective meanings:

     "Exercise  Period" shall mean the time period  commencing  with the date of
this Warrant and ending ten (10) years later.

     "Exercise  Price"  shall mean five  dollars  ($5.00) per share of Preferred
Stock.

     "Exercise  Shares" shall mean the shares of the Company's  Preferred  Stock
issuable upon exercise of this  Warrant,  subject to adjustment  pursuant to the
terms herein, including Section 5 below.

                                       1
<PAGE>

     2.  EXERCISE  OF WARRANT.  The rights  represented  by this  Warrant may be
exercised  in  whole or in part at any  time  during  the  Exercise  Period,  by
delivery of the  following  to the Company at its address set forth above (or at
such other address as it may designate by notice in writing to the Holder):

     (a) An executed Notice of Exercise in the form attached hereto;

     (b) Payment of the Exercise  Price either (i) in cash or by check,  or (ii)
by cancellation of indebtedness; and

     (c) This Warrant.

     Upon the exercise of the rights  represented by this Warrant, a certificate
or certificates for the Exercise Shares so purchased,  registered in the name of
the Holder or persons  affiliated with the Holder,  if the Holder so designates,
shall be issued and delivered to the Holder  within a reasonable  time after the
rights represented by this Warrant shall have been so exercised.

     The person in whose  name any  certificate  or  certificates  for  Exercise
Shares are to be issued upon  exercise of this  Warrant  shall be deemed to have
become the holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such  certificate  or  certificates,  except that, if the date of
such  surrender  and  payment  is a date  when the stock  transfer  books of the
Company  are closed,  such  person  shall be deemed to have become the holder of
such shares at the close of business  on the next  succeeding  date on which the
stock transfer books are open.

     In the event the Holder (i) disagrees with the  certification  set forth in
the Officer's  Certificate  that the conditions set forth on Exhibit A have been
met and (ii) fails to exercise  the Warrant  within 30 days after the receipt of
the Drawdown Notice and the Officer's Certificate (a "Default"), then the Holder
shall,  within 10 days of the receipt of the Drawdown  Notice and the  Officer's
Certificate,  deliver to the Company a signed written statement setting forth in
detail the basis for its  disagreement.  The Company and the Holder  shall then,
within 10 days, refer the matter to BDO Seidman,  LLP, the Company's independent
auditors (the "Arbitrator"),  for binding resolution.  The Arbitrator shall have
the authority to establish such procedures as the Arbitrator  deems  appropriate
to resolve such  disagreement  and the parties shall  cooperate in good faith to
resolve such disagreement as soon as practicable but in any event within 30 days
of  referral of the matter to the  Arbitrator.  The  decision of the  Arbitrator
shall be final.  The fees and expenses of the Arbitrator  shall be shared by the
parties  based on the  degree to which the  Arbitrator  accepts  the  respective
positions of the parties, as conclusively determined by the Arbitrator.

     In the event the  Arbitrator  determines  that the  conditions set forth on
Exhibit A have been met and the Holder fails to exercise  the Warrant  within 10
days after the Arbitrator's  decision, the Company shall have the right, without
limitation,  to issue and sell an aggregate of up to $5 million  dollars in debt
or equity securities of the Company,  in a public or private offering,  provided
that the  price per share of such  securities  shall not be less than  $1.25 and


                                       2
<PAGE>

such securities  shall rank pari passu or junior to the Series A Preferred Stock
and the Series A-1 Preferred Stock (the "Default Financing"). To the extent that
such  approval of the Holders is required by  applicable  law, the Holders shall
vote all of their shares for and raise no objection to the Default Financing.

     3. COVENANTS OF THE COMPANY.

     3.1. Covenants as to Exercise Shares. The Company covenants and agrees that
all  Exercise  Shares  that  may be  issued  upon  the  exercise  of the  rights
represented  by  this  Warrant  will,  upon  issuance,  be  validly  issued  and
outstanding,  fully paid and  nonassessable,  and free from all taxes, liens and
charges with respect to the issuance thereof.  The Company further covenants and
agrees that the  Company  will at all times  during the  Exercise  Period,  have
authorized and reserved,  free from preemptive  rights,  a sufficient  number of
shares  of its  Preferred  Stock  to  provide  for the  exercise  of the  rights
represented  by this  Warrant.  If at any time  during the  Exercise  Period the
number of  authorized  but  unissued  shares  of  Preferred  Stock  shall not be
sufficient  to permit  exercise  of this  Warrant,  the  Company  will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued  shares of Preferred  Stock to such number of shares
as shall be sufficient for such purposes.

     3.2. No  Impairment.  Except and to the extent as waived or consented to by
the Holder,  the Company will not, by amendment of its Articles of Incorporation
or  through  any  reorganization,  transfer  of assets,  consolidation,  merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the  observance or  performance of any of the terms to be observed
or  performed  hereunder  by the  Company,  but will at all times in good  faith
assist in the  carrying  out of all the  provisions  of this  Warrant and in the
taking of all such action as may be necessary or appropriate in order to protect
the exercise rights of the Holder against impairment.

     3.3. Notices of Record Date. In the event of any taking by the Company of a
record of the holders of any class of securities  for the purpose of determining
the holders  thereof who are entitled to receive any dividend (other than a cash
dividend which is the same as cash dividends paid in previous quarters) or other
distribution, the Company shall mail to the Holder, at least ten (10) days prior
to the date  specified  herein,  a notice  specifying the date on which any such
record is to be taken for the purpose of such dividend or distribution.

     4. REPRESENTATIONS OF HOLDER.

     4.1. Acquisition of Warrant for Personal Account. The Holder represents and
warrants that it is acquiring the Warrant  solely for its account for investment
and not with a view to or for sale or  distribution  of said Warrant or any part
thereof, other than potential transfers between affiliates (including affiliated
funds).  The  Holder  also  represents  that the  entire  legal  and  beneficial
interests  of the Warrant and  Exercise  Shares the Holder is acquiring is being
acquired for, and will be held for, its account only.

                                       3
<PAGE>
     4.2. Securities Are Not Registered.

     (a) The Holder  understands  that the Warrant and the Exercise  Shares have
not been registered  under the Securities Act of 1933, as amended (the "Act") on
the basis that no distribution or public offering of the stock of the Company is
to be effected.  The Holder realizes that the basis for the exemption may not be
present  if,  notwithstanding  its  representations,  the  Holder  has a present
intention of acquiring the securities for a fixed or determinable  period in the
future,  selling (in connection with a distribution or otherwise),  granting any
participation  in, or otherwise  distributing the securities.  The Holder has no
such  present  intention,  other than  potential  transfers  between  affiliates
(including affiliated funds).

     (b) The Holder  recognizes that the Warrant and the Exercise Shares must be
held  indefinitely  unless they are subsequently  registered under the Act or an
exemption from such registration is available.

     (c) The Holder is aware that  neither the Warrant nor the  Exercise  Shares
may be sold pursuant to Rule 144 adopted under the Act unless certain conditions
are met, including, among other things, the existence of a public market for the
shares,  the  availability  of  certain  current  public  information  about the
Company, the resale following the required holding period under Rule 144 and the
number of  shares  being  sold  during  any three  month  period  not  exceeding
specified limitations.  Holder is aware that the conditions for resale set forth
in Rule 144 have not been satisfied and that the Company  presently has no plans
to satisfy these conditions in the foreseeable future.

     4.3. Disposition of Warrant and Exercise Shares.

     (a) The Holder  further  agrees not to make any  disposition  of all or any
part of the Warrant or Exercise Shares in any event unless and until:

          (i) The  Company  shall have  received a letter  secured by the Holder
     from the Securities and Exchange  Commission stating that no action will be
     recommended to the Commission with respect to the proposed disposition; or

          (ii) There is then in effect a  registration  statement  under the Act
     covering  such  proposed  disposition  and  such  disposition  is  made  in
     accordance with said registration statement; or

          (iii) The  Holder  shall have  notified  the  Company of the  proposed
     disposition  and shall have  furnished  the Company with a statement of the
     circumstances surrounding the proposed disposition; provided, however, that
     such statement will not be required if the  disposition is permitted  under
     Rule 144 of the Securities Act.

     (b) The Holder  agrees  not to sell this  Warrant  or the  Exercise  Shares
during a period  specified by the  representative  of the underwriters of Common


                                       4
<PAGE>
Stock (not to exceed one hundred eighty (180) days) following the effective date
of the initial  registration  statement  of the Company  filed under the Act, so
long as all officers,  directors,  and 1%  stockholders  have  executed  similar
agreements and are similarly restricted from selling the Company's stock.

     (c)  Notwithstanding  the provisions of paragraphs  (a) and (b) above,  the
Holder may assign  this  Warrant and the  Exercise  Shares to (i) any partner or
retired  partner  of the Holder if Holder is a  partnership,  (ii) any member or
former member of the Holder if Holder is a limited liability company,  (iii) any
affiliate, including affiliated funds or (iv) any family member or trust for the
benefit of the Holder if the Holder is an individual;  provided that the Company
is given written notice thereof.

     5.  ADJUSTMENT OF EXERCISE  PRICE AND NUMBER OF SHARES.  The Exercise Price
and the number of shares  purchasable upon the exercise of this Warrant shall be
subject to adjustment  from time to time upon the  occurrence of certain  events
described in this Section 5. Upon each  adjustment  of the Exercise  Price,  the
Holder of this Warrant shall thereafter be entitled to purchase, at the Exercise
Price  resulting  from  such  adjustment,  the  number  of  shares  obtained  by
multiplying the Exercise Price in effect immediately prior to such adjustment by
the  number of shares  purchasable  pursuant  hereto  immediately  prior to such
adjustment,  and dividing the product  thereof by the Exercise  Price  resulting
from such adjustment.

     5.1.  Subdivision or Combination of Stock. In case the Company shall at any
time  subdivide its  outstanding  shares of the  Preferred  Stock into a greater
number  of  shares,  the  Exercise  Price in  effect  immediately  prior to such
subdivision  shall  be  proportionately  reduced,  and  conversely,  in case the
outstanding  shares of the Preferred Stock of the Company shall be combined into
a smaller number of shares,  the Exercise Price in effect  immediately  prior to
such combination shall be proportionately increased.

     5.2. Dividends in Preferred Stock, Other Stock, Property, Reclassification.
If at any time or from time to time the holders of the  Preferred  Stock (or any
shares of stock or other  securities at the time receivable upon the exercise of
this Warrant) shall have received or become entitled to receive, without payment
therefor,

     (a) Preferred Stock or any shares of stock or other securities which are at
any  time  directly  or  indirectly  convertible  into or  exchangeable  for the
Preferred  Stock,  or any  rights or  options  to  subscribe  for,  purchase  or
otherwise acquire any of the foregoing by way of dividend or other distribution,

     (b) any cash paid or payable otherwise than as a cash dividend, or

     (c)  Preferred  Stock or additional  stock or other  securities or property
(including cash) by way of spinoff, split-up,  reclassification,  combination of
shares or similar corporate  rearrangement,  (other than shares of the Preferred
Stock  issued as a stock  split or  adjustments  in  respect  of which  shall be
covered  by the terms of Section  5.1  above),  then and in each such case,  the
Holder hereof shall, upon the exercise of this Warrant,  be entitled to receive,
in addition to the number of shares of Common Stock  receivable  thereupon,  and
without payment of any additional  consideration  therefor,  the amount of stock
and other  securities and property  (including  cash in the cases referred to in
clause (b) above and this clause  (c)) which such Holder  would hold on the date
of such exercise had he been the holder of record of such Preferred  Stock as of
the date on which holders of the Preferred  Stock received or became entitled to


                                       5
<PAGE>

receive  such  shares or all other  additional  stock and other  securities  and
property.

     5.3. Reorganization,  Reclassification,  Consolidation,  Merger or Sale. If
any recapitalization, reclassification or reorganization of the capital stock of
the  Company,  or any  consolidation  or  merger  of the  Company  with  another
corporation,  or the sale of all or  substantially  all of its  assets  or other
transaction  shall be effected in such a way that holders of the Preferred Stock
shall be entitled to receive stock, securities,  or other assets or property (an
"Organic  Change"),  then,  as a condition  of such Organic  Change,  lawful and
adequate provisions shall be made by the Company whereby the Holder hereof shall
thereafter  have the right to purchase and receive (in lieu of the shares of the
Preferred  Stock  immediately  theretofore  purchasable  and receivable upon the
exercise of the rights represented  hereby) such shares of stock,  securities or
other  assets or  property  as may be issued or  payable  with  respect to or in
exchange for a number of outstanding shares of such Preferred Stock equal to the
number  of  shares  of  such  stock  immediately   theretofore  purchasable  and
receivable  upon  the  exercise  of the  rights  represented  hereby;  provided,
however, that in the event the value of the stock, securities or other assets or
property  (determined  in good faith by the Board of  Directors  of the Company)
issuable or payable with respect to one share of the Preferred Stock immediately
theretofore   purchasable  and  receivable  upon  the  exercise  of  the  rights
represented  hereby is in excess of the Exercise  Price hereof  effective at the
time of a merger and  securities  received in such  reorganization,  if any, are
publicly  traded,  then this Warrant shall expire unless exercised prior to such
Organic Change. In the event of any Organic Change,  appropriate provision shall
be made by the Company with respect to the rights and interests of the Holder of
this  Warrant  to  the  end  that  the  provisions  hereof  (including,  without
limitation,  provisions for  adjustments of the Exercise Price and of the number
of shares  purchasable  and receivable  upon the exercise of this Warrant) shall
thereafter  be  applicable,  in relation to any shares of stock,  securities  or
assets  thereafter  deliverable upon the exercise  hereof.  The Company will not
effect any such consolidation,  merger or sale unless, prior to the consummation
thereof,  the successor  corporation (if other than the Company)  resulting from
such  consolidation  or the  corporation  purchasing such assets shall assume by
written instrument  reasonably  satisfactory in form and substance to the Holder
substantially  similar to this  Warrant to  purchase  the  Preferred  Stock then
outstanding, executed and mailed or delivered to the registered Holder hereof at
the last  address of such  Holder  appearing  on the books of the  Company,  the
obligation to deliver to such Holder such shares of stock,  securities or assets
as, in accordance with the foregoing provisions,  such Holder may be entitled to
purchase.

     5.4.  Certain Events.  If any change in the outstanding  Preferred Stock or
any other event  occurs as to which the other  provisions  of this Section 5 are
not strictly  applicable or if strictly  applicable would not fairly protect the
purchase rights of the Holder of the Warrant in accordance with such provisions,
then the Board of  Directors  of the  Company  shall make an  adjustment  in the
number and class of shares  available  under the Warrant,  the Exercise Price or
the  application of such  provisions,  so as to protect such purchase  rights as
aforesaid.  The adjustment  shall be such as will give the Holder of the Warrant


                                       6
<PAGE>

upon exercise for the same aggregate Exercise Price the total number,  class and
kind of shares as he would have owned had the Warrant  been  exercised  prior to
the  event  and had he  continued  to hold  such  shares  until  after the event
requiring adjustment.

     5.5. Notices of Change.

     (a)  Immediately  upon any  adjustment  in the  number  or class of  shares
subject to this  Warrant  and of the  Exercise  Price,  the  Company  shall give
written  notice  thereof to the Holder,  setting forth in reasonable  detail and
certifying the calculation of such adjustment.

     (b) The  Company  shall  give  written  notice  to the  Holder  at least 10
business days prior to the date on which the Company closes its books or takes a
record for determining rights to receive any dividends or distributions.

     (c) The Company  shall also give  written  notice to the Holder at least 30
business days prior to the date on which an Organic Change shall take place.

     6.  FRACTIONAL  SHARES.  No  fractional  shares  shall be  issued  upon the
exercise of this Warrant as a consequence of any adjustment pursuant hereto. All
Exercise Shares (including fractions) issuable upon exercise of this Warrant may
be aggregated for purposes of  determining  whether the exercise would result in
the issuance of any fractional share. If, after aggregation,  the exercise would
result in the  issuance of a fractional  share,  the Company  shall,  in lieu of
issuance of any  fractional  share,  pay the Holder  otherwise  entitled to such
fraction a sum in cash equal to the product  resulting from multiplying the then
current fair market value of an Exercise Share by such fraction.

     7. NO STOCKHOLDER  RIGHTS.  This Warrant in and of itself shall not entitle
the Holder to any voting rights or other rights as a stockholder of the Company.

     8. TRANSFER OF WARRANT.  Subject to applicable  laws,  this Warrant and all
rights hereunder are transferable, by the Holder in person or by duly authorized
attorney,  upon  delivery of this  Warrant and the form of  assignment  attached
hereto to any transferee designated by Holder.

     9. LOST, STOLEN,  MUTILATED OR DESTROYED WARRANT.  If this Warrant is lost,
stolen,  mutilated or destroyed,  the Company may, on such terms as to indemnity
or  otherwise  as it may  reasonably  impose  (which  shall,  in the  case  of a
mutilated Warrant,  include the surrender thereof),  issue a new Warrant of like
denomination and tenor as the Warrant so lost,  stolen,  mutilated or destroyed.
Any such new Warrant shall constitute an original contractual  obligation of the
Company,  whether or not the  allegedly  lost,  stolen,  mutilated  or destroyed
Warrant shall be at any time enforceable by anyone.

     10.  NOTICES,  ETC.  All  notices  and  other  communications  required  or
permitted hereunder shall be in writing and shall be sent by facsimile,  express
mail or other form of rapid  communications,  if possible,  and if not then such


                                       7
<PAGE>

notice or communication  shall be mailed by first-class  mail,  postage prepaid,
addressed in each case to the party entitled thereto at the following addresses:
(a) if to the Company, to On Stage Entertainment,  Inc.,  Attention:  President,
4625 West Nevso Drive, Las Vegas,  Nevada 89103 and (b) if to the Holder, to MDC
IV, L.P. and Affiliates, 3000 Sand Hill Road, Building 3, Suite 290, Menlo Park,
California,  Attn:  Robert  Hellman  or at such  other  address as one party may
furnish to the other in writing.  Notice  shall be deemed  effective on the date
dispatched if by personal delivery or confirmed facsimile transmission, two days
after  mailing if by express mail,  three days after  mailing if by  first-class
mail  within  California,  or  five  days  if by  first-class  mail  outside  of
California.

     11.  ACCEPTANCE.  Receipt of this  Warrant by the Holder  shall  constitute
acceptance of and agreement to all of the terms and conditions contained herein.

     12.  EQUITABLE  RELIEF.  The Holder  recognizes  and affirms if it fails to
exercise the Warrant  within 10 days after a final decision has been rendered by
the Arbitrator  pursuant to Section 2, the Company would have no adequate remedy
at law.  The Holder  therefore  agrees  that the  Company  shall be  entitled to
injunctive  relief or other equitable relief in addition to any other rights and
remedies existing in its favor

     13. GOVERNING LAW. This Warrant and all rights, obligations and liabilities
hereunder shall be governed by the laws of the State of California.



                                       8
<PAGE>
     IN WITNESS  WHEREOF,  the Company has caused this Warrant to be executed by
its duly authorized officer.

                                   ON STAGE ENTERTAINMENT, INC.


                                   By: _______________________________
                                   Name: _____________________________
                                   Title: ____________________________








<PAGE>



                                    EXHIBIT A

                        CONDITIONS TO FURTHER INVESTMENT

     The Company will be entitled to drawdown  funds from tranches two and three
of the MDC  Commitment  (as  defined  in the Term  Sheet and  Letter of  Intent)
subject to the following three conditions:

1.   Drawdown Notice. Prior to the availability of the Company to drawdown funds
     from tranches two and three of the MDC Commitment,  the Company must submit
     to the Board of  Directors a drawdown  notice that  includes  the  proposed
     funding amount and use of proceeds.  The proposed funding amount identified
     in the drawdown notice must be in installments in excess of $2 million. The
     use of  proceeds  must  identify  specific  acquisition  or organic  growth
     opportunities for which the additional funding will be used.

2.   Compliance  with EBITDA  Budget.  The Company  will be eligible to drawdown
     funds  from  tranches  two and  three  of the MDC  Commitment,  only if the
     Company  has met the  EBITDA  (before  the  deduction  of MDC fees)  budget
     approved  by the Board of  Directors  for the  current  fiscal year to date
     period.

3.   Minimum  Investment  Return (IRR)  Hurdle.  The Company will be eligible to
     drawdown  funds from tranches two and three of the MDC  Commitment  only if
     MDC has earned a minimum  annualized rate of return of 35% per annum on its
     funded investment.  MDC's annualized rate of return will be calculated on a
     quarterly basis using an IRR calculation. The IRR calculation will be based
     on cash outflows  equal to MDC's initial and follow-on  investments  in the
     Company  and an ending cash  inflow  equal to the "MDC  Equity  Value" upon
     liquidation of its  investment in the Company.  The "MDC Equity Value" will
     be calculated by multiplying MDC's fully diluted  ownership  (assuming full
     conversion of  convertible  securities  that MDC has funded,  excluding the
     warrants  related to the remaining MDC  Commitment)  of the Company (at the
     end of each fiscal year) by the "Total  Equity Value of the  Company".  The
     Total Equity Value of the Company will be  calculated  by  multiplying  the
     Company's   Annualized   EBITDA  (as  defined  below)  by  five  (5.0)  and
     subtracting   the  net  debt  (total   indebtedness   less  cash  and  cash
     equivalents) on the Company's balance sheet. For fiscal 2001, the Company's
     Annualized  EBITDA shall be $3.582 million (or the board approved  budgeted
     EBITDA for fiscal 2001) plus any positive EBITDA variance to budget for the
     year to date period or less any negative  EBITDA  variance -- to budget for
     the year to date period.  For fiscal 2002 and any  subsequent  fiscal year,
     the  Company's  Annualized  EBITDA  shall be the  Company's  actual  EBITDA
     calculated on a last twelve months trailing basis.







<PAGE>




                                        1
                               NOTICE OF EXERCISE

TO:  ON STAGE ENTERTAINMENT, INC.

         (1) The undersigned hereby elects to purchase ________ shares of the
Preferred Stock of ON STAGE ENTERTAINMENT, INC. (the "Company") pursuant to the
terms of the attached Warrant, and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if any.

          (2) Please issue a certificate or certificates representing said
shares of Preferred Stock in the name of the undersigned or in such other name
as is specified below:

                                             ------------------------
                                     (Name)

                                             ========================
                                    (Address)

         (3) The undersigned represents that (i) the aforesaid shares of
Preferred Stock are being acquired for the account of the undersigned for
investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of
distributing or reselling such shares; (ii) the undersigned is aware of the
Company's business affairs and financial condition and has acquired sufficient
information about the Company to reach an informed and knowledgeable decision
regarding its investment in the Company; (iii) the undersigned is experienced in
making investments of this type and has such knowledge and background in
financial and business matters that the undersigned is capable of evaluating the
merits and risks of this investment and protecting the undersigned's own
interests; (iv) the undersigned understands that the shares of Preferred Stock
issuable upon exercise of this Warrant have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), by reason of a
specific exemption from the registration provisions of the Securities Act, which
exemption depends upon, among other things, the bona fide nature of the
investment intent as expressed herein, and, because such securities have not
been registered under the Securities Act, they must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such
registration is available; (v) the undersigned is aware that the aforesaid
shares of Preferred Stock may not be sold pursuant to Rule 144 adopted under the
Securities Act unless certain conditions are met and until the undersigned has
held the shares for the number of years prescribed by Rule 144, that among the
conditions for use of the Rule is the availability of current information to the
public about the Company and the Company has not made such information available
and has no present plans to do so; and (vi) the undersigned agrees not to make
any disposition of all or any part of the aforesaid shares of Preferred Stock
unless and until there is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with said registration statement, or the undersigned has provided
the Company with an opinion of counsel satisfactory to the Company, stating that
such registration is not required.

-----------------------                 ----------------------------
(Date)                                 (Signature)

                                       ----------------------------
                                       (Print name)


<PAGE>

                                 ASSIGNMENT FORM


          (To  assign  the  foregoing  Warrant,  execute  this  form and  supply
          required information. Do not use this form to purchase shares.)


     FOR VALUE RECEIVED,  the foregoing Warrant and all rights evidenced thereby
are hereby assigned to

Name:
       ----------------------------------------------------------------------
                                 (Please Print)

Address:
         ------------------------------------------------------------------
                                 (Please Print)

Dated: _________________

Holder's
Signature:
           ------------------------------------------------------------

Holder's
Address:
         --------------------------------------------------------------



NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatever. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.



<PAGE>


            Schedule of Omitted Warrants for Series A Preferred Stock

Warrant issued to McCowan De Leeuw IV, L.P.

Warrant issued to McCowan De Leeuw IV Associates, L.P.

Warrant issued to Delta Fund, L.P.

Warrant issued to Board of Trustees of the Leland Standford Junior University